A Smarter Way to Unlock Boomer Equity for First-Home Buyers

Series note: Commentary on how decisions are made, who makes them, and what they actually produce.

By Aiden Garrison

A few people I respect came back to me after reading my recent articles and said — your writing is broad. You diagnose the problem well. But where are the solutions?

Fair enough.

So I sat with it. And this is what I came up with.

The housing debate in Australia has become a shouting match. On one side: young people just need to save harder. On the other: boomers are hoarding all the wealth. Both sides miss what is already happening right under their noses.

A huge slice of boomer equity is already being used informally through the Bank of Mum and Dad. Surveys suggest that between 17 and 34 per cent of first-home buyers already receive meaningful financial help from family. The Bank of Mum and Dad is already one of the largest sources of housing finance in the country — it just operates in the shadows, informally, inefficiently, and at significant cost to the families involved.

The real question is whether the tax and grant system makes that help easier or harder.

Right now it makes it harder.

Parents with substantial home equity are often willing to help their adult children buy their first home. But the current rules punish the sensible, low-risk ways of doing it. Cross-collateralised loans, joint title arrangements, structured family equity deals — they trigger stamp duty, wipe out the First Home Owner Grant, and create CGT exposure for the parent.

The result? Families either hand over straight cash gifts — which most parents hate because they lose all control — or they do nothing at all.

There is a better way.

What I'm proposing

Three simple, narrow carve-outs. That's it.

One — a child buying their first home can still qualify for the full First Home Owner Grant and stamp duty concessions even if a parent is also on title.

Two — zero stamp duty on the initial purchase and again when the parent is later removed from title.

Three — a specific CGT exemption: the parent's pre-agreed share of any capital gain — say 25% — is completely tax-free on exit. Capped, time-bound, and restricted to genuine first-home buyer arrangements to prevent anyone gaming the system.

The mechanics are straightforward and already exist in the banking system.

Parent and child go on title together. The bank lends the full purchase price against both the new property and the parent's existing home. Because the parent's equity brings the combined loan-to-value ratio comfortably under 80%, no lenders mortgage insurance is triggered. No deposit is required. The child pays 100% of the mortgage repayments from day one and lives in the property as their principal place of residence. After roughly five years — once the LVR has improved further through repayments and any price growth — the child refinances into their sole name. The parent comes off title, off the mortgage, and receives their agreed share of the capital gain, tax-free.

The parent has zero ongoing cash outlay. The child proves they can service the debt. The bank has strong security across two properties. Everyone has skin in the game.

In practice, parents are already exposed to these arrangements through standard joint and several liability — whether via guarantees or co-borrowing. The difference here is not the existence of risk, but that it is structured, visible, and aligned with a defined share of the upside.

Let me show you how it works

A $750,000 house in Brisbane. The bank lends the full $750,000, secured against both the new property and the parent's existing home. The combined security keeps the LVR well under 80%. No deposit. No lenders mortgage insurance.

After five years of the child making all repayments, the property is worth $920,000 and the loan balance is down to $620,000.

Total capital gain: $170,000.

Parent's 25% share: $42,500 — received tax-free.

The child now owns the home and has built genuine equity. The parent has earned a real return on equity they would otherwise have left sitting in their home until they downsized or died.

Compare that to the status quo. The same family either gifts cash — and the parent gets nothing back — or waits until the boomer downsizes and pushes the money into super under the existing $300,000 downsizer contribution rule, where it then sits inaccessible to the child when they actually need it.

This model brings that capital forward. Into ownership. Into productivity. Into the hands of the next generation when it actually matters — not at the end of a life, but at the start of one.

Why this is different to every other housing policy

Most first-home buyer policies are blunt demand-side subsidies. They inject new money into the market and push prices up. Critics will say this scheme does the same thing.

They're wrong.

This does not create new borrowing capacity in the system. It reallocates existing household balance sheets. The parent's equity already exists. The bank is already lending against it informally in many cases. This simply formalises and de-risks what is already happening — rather than injecting new demand into an overheated market.

It costs the budget almost nothing. It removes friction rather than adding subsidy.

If between 17 and 34 per cent of first-home buyers are already getting family help under the current hostile rules, imagine what that number looks like once the friction is removed. More young Australians into ownership. More family equity doing productive work. More of the intergenerational transfer happening now, when it matters, rather than at the end of a life when it is too late to change a young person's trajectory.

That is what good policy looks like.

Not another grant. Not another scheme. Not another task force.

Just a framework that gets out of the way of what families already want to do.

Government's job here is simple — legislate the carve-outs, set the guardrails, and step back. The market and the families will do the rest.

The intergenerational wealth transfer is not the question.

Timing is.

Right now the system delays it until death. This brings it forward — into ownership, into productivity, and into the hands of the next generation when it actually matters.

The current rules treat every joint-title arrangement as a potential rort and every gain as fully taxable. This does the opposite — it measures what actually happened and rewards the behaviour we say we want.

Whether by intent or not, today's system favours keeping equity locked up.

This one tilts the field toward releasing it.

That is not a flaw in the reform.

It is the design.